by Brian Blackstone
Wall Street Journal
June 6, 2011
No one states the European Central Bank’s opposition to any form of Greek debt restructuring more colorfully than ECB executive board member Lorenzo Bini Smaghi.
At various times over the past few weeks, the Italian economist has called debt restructuring a “disaster” and “catastrophe” that would leave Greece “on its knees,” and even amount to a “death sentence.”
He switched gears Monday from the crippling effects of a restructuring on Greece to what he thinks about those that are still pushing the idea. Continuing to pursue the idea of private-sector involvement or “PSI” in restructuring Greece’s debt “suggests strong masochistic tendencies,” Bini Smaghi said in a speech.
His remarks come as support is apparently building among European governments to include private-sector involvement in any revamping of Greece’s rescue program, perhaps via a debt exchange — a proposal backed by Germany.
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Read the Speech by Lorenzo Bini Smaghi
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